Supreme Court: Decision Nears on 'Obamacare'

WASHINGTON -- The Supreme Court is expected to announce its ruling on the Affordable Care Act (ACA) this month and speculation about the impact of that decision is heating up on both sides of the "Obamacare" debate.

And both sides predict disaster for doctors -- massive disruption if the law is struck down -- or if it is upheld.

If the court decides to go with something in between, confusion is likely to be the short-term result.

Under this scenario, the law's most controversial provision -- the mandate that everyone must have health insurance or else pay a penalty -- would be ruled unconstitutional, but everything else in the law -- including the insurance market reforms, health insurance exchanges, and subsidies for those who can't afford insurance -- would remain.

The states that are suing the government want the Supreme Court to strike down the entire law if the individual mandate is found to be unconstitutional.

The Obama administration counters with a "half a loaf" argument: if the mandate is found to be unconstitutional, the law should be able to stand, with the exception of two provisions -- the guaranteed-issue provision, which bans insurers from refusing to offer coverage due to a preexisting medical condition, and the community rating provision, which bars insurers from charging higher premiums based on a person's medical history.

Most agree that the guaranteed issue and community rating provisions would be difficult to enforce absent the requirement that everyone have health insurance.

During oral arguments on the issue -- known as the mandate's "severability" -- the Supreme Court justices enunciated these differing positions.

No, said Paul Clement, the lawyer for the 26 states that are suing the federal government over the law. Sometimes no loaf is indeed better than half a loaf, he said. In the case of the ACA, the mandate is too integral to the overall survival of the whole law.

"If you don't have the individual mandate to force people into the market, premiums will skyrocket," Clement said during oral arguments in March.

Clement and the Obama administration agree that without forcing young and healthy people into the insurance market, many would not buy insurance. That would mean the insurance pool would largely be comprised of less-healthy people, which would cause insurance to be more expensive for everyone.

A brief about the different decision scenarios issued by consulting firm Deloitte said the mandate being struck down but other parts remaining is a "distinct possibility."

Leonardo Cuello, an attorney and director of health reform for the National Health Law Program, which advocates for low-income individuals, gave it 50/50 odds.

The Entire Law Is Struck Down

If the mandate is found to violate the Constitution and the justices also decide it's too enmeshed in the larger law to be separated, they could overturn the entire law.

This outcome would be the most disruptive to doctors, said Ron Pollack, executive director of Families USA, a liberal consumer group that supports the ACA. That's because they've already been working to prepare for the law -- for example, by taking steps to form accountable care organizations encouraged under the law.

Hospitals, meanwhile, may be bearing the brunt in preparing for major changes under the ACA. Hospitals are already cutting costs to absorb the $155 billion the industry agreed to give up to fund the expansion of health insurance under the ACA, the Deloitte brief said.

Aside from affecting doctors directly, it's U.S. citizens as a whole who have benefited from provisions of the law that have already been implemented, according to the Deloitte consultants. Some 27.8 million people have already been impacted, including seniors who have received doughnut hole rebates and young adults under 26 who are now covered by their parents' insurance plan.

Consultants at Deloitte predicted the entire law would likely not be overturned.

The Entire Law Remains As Is

"If you want chaos, this is a good way to do it," Joe Antos of the American Enterprise Institute, a right-leaning think tank, said of this option. He added that he thinks the court will go this route and either uphold the law, or else rule the mandate unconstitutional -- but it won't repeal the whole thing.

"If everything is allowed to continue, there's a lot of uncertainly about how the law will actually be implemented," Antos said.

Grace Marie Turner, president of the Galen Institute, a free-market think tank, predicted that even if the law remains as is, many provisions will have to be tweaked once they are deemed unworkable.

For instance, many states are not ready to start health insurance exchanges in 2014, so that provision may have to be substantially delayed. She also predicted that states may not have the capacity to treat new patients that would be brought into the system by the ACA's expansion of Medicaid in 2014, so the start date on that could very well be pushed back as well.

Pollack disagrees with Antos and Turner and said if the law remained as is, it would be the least disruptive for doctors and for patients.

Medicaid Expansion is Removed from Law

Another option -- striking down the ACA's Medicaid expansion, is thought to be an unlikely outcome of the Supreme Court challenge.

Starting in 2014, the ACA expands Medicaid to cover nearly all people under age 65 with household incomes at or below 133% of the federal poverty level.

Currently, most states' Medicaid programs only cover pregnant women and children who are very poor, as well as certain low-income, disabled adults. Congress has never required mandatory coverage criteria for childless adults who are not within the covered categories, but it has expanded the Medicaid program a number of times.

The 26 states that are suing the federal government over the law argue that the Medicaid expansion is a violation of the Spending Clause of the Constitution largely because it's coercive -- it conditions receipt of all federal Medicaid funds on the states' expanding Medicaid.

"How can they claim that this is coercive?" asked Antos. "It doesn't seem reasonable to me. "

Cuello also said he'd be surprised if the court ruled the Medicaid expansion unconstitutional.

The Anti-Injunction Act Is Ruled Applicable and the Court Defers its Decision

Finally, the court must decide whether an 1867 federal law called the Anti-Injunction Act, which prohibits a lawsuit from being brought over a particular tax until that tax actually takes effect, applies in the case of the ACA.

Under the ACA, everyone is required to have health insurance starting in 2014, or else pay a penalty in 2015. If the court were to decide the Anti-Injunction Act bars the issue from being heard now because 2015 is still several years away, the Supreme Court could postpone a decision on the controversial healthcare law until after 2015 -- the year in which the penalty would first be collected.

Both sides -- the Obama administration and the 26 states suing the federal government -- agree that the old tax law doesn't apply to the ACA and shouldn't stand in the way of a court ruling on the case.

Based on oral arguments, and the fact that no side is pushing for the tax law to apply, it is unlikely the court would defer a decision based on the Anti-Injunction Act, experts agree.

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